Volvo hopes to gain some pace with new cars amid slowdown

The company had just a fringe presence until the end of last year, with a 3% market share and annual sales of 2,638 units.

ET Bureau|

Updated: Sep 05, 2019, 11.39 AM IST

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Volvo is a relatively new entrant to the Indian luxury car market,

By Nehal Chaliawala & Himanshi Lohchab

MUMBAI: In a contracting market for luxury vehicles in India, Swedish carmaker Volvo hopes to outperform its rivals and grab incremental market share, on the back of new products and a low base to compare with.

“We have seen that we’re gaining some market share, although at a smaller base,” Charles Frump, the managing director at Volvo Car India, told ET. “We have continued to expand our dealer network. We continue to invest in marketing and brand building. Because it is an opportunity,” he said along the side lines of the launch of its XC90 Excellence Lounge hybrid SUV.

A relatively new entrant to the Indian luxury-car market, the company had just a fringe presence until the end of last year, with a 3% market share and annual sales of 2,638 units. In the January to June period of 2019, when the luxury-car market shrank by a quarter, Volvo posted growth of 11% with sales of 1,159 units, cornering a market share of over 6%.

However, the demand slowdown in the market has now caught up with the Swedish carmaker, too. "We'll do very well if we sell the same number of cars as last year,” Frump said, indicating that sales for the company in the latter half of the year would decline when compared with last year.

Apart from the demand slowdown, another factor that restricted the growth of Volvo in India during the ongoing year was the limited availability of its XC40 SUV, he said. The entry-level product to the Volvo brand is imported into India and, given its high demand in Europe, only limited numbers were made available for India, said Frump.

The company is counting on its plug-in hybrid luxury SUVs to be a differentiator for the brand in the intensely competitive luxury-car market. In fact, India was the largest market for its premium hybrid SUV, XC90 Excellence, which is a four-seat version of its full-sized XC90 SUV. The company has sold more than 100 units of the vehicle in India so far, Frump said.

Emboldened by the success of the XC90 Excellence, Volvo chose India for the global launch of the XC90 Excellence Lounge, which is a three-seater version of the SUV and the most premium product in Volvo’s global portfolio.